The Honorable John Kasich
U.S. House of Representatives
Committee on Budget
309 CHOB
Washington, DC 20515

Dear Chairman Kasich:

The American Association for Clinical Chemistry (AACC) strongly opposes the President’s FY’99 budget provision that would require clinical laboratories and other health care providers to fund federal audits of their operations. We believe this provision duplicates current Department of Health and Human Services (HHS) Office of the Inspector General (OIG) efforts to reduce fraud and abuse. AACC believes that this proposal would increase the compliance costs for clinical laboratories, while yielding no further reductions in financial misconduct. We urge you not to include this provision in the FY’99 budget.

Last year, the OIG published a model compliance plan for clinical laboratories. This voluntary plan details a framework for assisting laboratories to identify and eliminate fraudulent or abusive billing practices. This model plan encourages all laboratories to continually self-audit their services to ensure that they are not illegally or inappropriately billing for services. Since many, if not most, laboratories will be adopting a compliance plan, it seems redundant to require federal auditors to do what the private sector is already doing. It’s also important to note that most large clinical laboratories, which have been the subject of most federal investigations, already have such plans in place as part of their settlements with the government.

Also, the current difficult economic climate for clinical laboratories makes this costly, unnecessary mandate especially burdensome. The expansion of managed care, compliance with federal regulations and continual reductions in Medicare reimbursement (including the Balanced Budget Act of 1997) have significantly increased financial pressures on many laboratories. If enacted, the President’s plan would place one more financial and administrative burden on clinical laboratories with little or no gain to the Medicare program. Therefore, we urge you to oppose the President’s recommendation to collect user fees from health care providers to pay for annual cost audits.

By way of background, AACC is the principal association of clinical chemists--professional laboratory scientists--including MDs, PhDs and medical technologists. AACC’s members develop and use chemical concepts, procedures, techniques and instrumentation in health-related investigations and work in hospitals, independent laboratories and the diagnostics industry nationwide. The AACC's objectives are to further the public interest and educational activities and help maintain high professional standards.

If you have any questions or we may be of any assistance, please call me at (717) 531-8316 or Vince Stine, Manager, Government Affairs at (202) 835-8721.



Stephen Kahn, PhD, DABCC


Page Access: